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Politics : Formerly About Advanced Micro Devices
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To: TimF who wrote (524191)10/28/2009 3:26:03 PM
From: tejek1 Recommendation  Read Replies (1) of 1578137
 
Not one penny is due to higher spending.

Every penny is due to higher spending. The baseline Bartlet's using is from a spending level increase that had already increased massively (and which is projected to continue to increase at a pretty good clip).

Of course spending grew dramatically under Bush....there were two wars and considerable pork spending but he's talking in reference to the stimulus. He's saying the most recent year's deficit is due to weaker revenues...thanks in no small part to Bush's tax cuts......and not to additional spending.

As if we needed further evidence that transfers have virtually no stimulative effect, the Bureau of Labor Statistics just issued a report on the 2008 tax rebate showing that only 30 percent of the money was spent; the rest was saved, thus providing no stimulus to short-run growth.

Further evidence implies some initial evidence, which isn't provided. Also Bartlet's looking at a single one time tax rebate, not a tax cut. Its essentially one time spending. The government already taxed money, now its handing money out. Such a tax rebate doesn't change incentives at all, the decisions leading to the income that was taxed where made without knowledge of the future rebate, future decisions will not rely on the rebate because it was supposed to be one time. The rebate/spending comes from borrowing more money, which implies likely future higher taxes. Saving it, esp. in bad times, is just being prudent.

And even by Bartlett's own statement (quoting the CBO) 30% was spent. If spending is "stimulus" you had 30% stimulus (assuming the CBO's report is accurate), not "no stimulus effect".

Its been proven over and over again that tax cuts are not very stimulative. His analysis just adds one more nail to the coffin.

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